Court rejects customs' argument that Adani imported capital items at an excessively high price

In a case involving the alleged overvaluation of imported commodities, the Supreme Court rejected the customs department's appeal against Adani Power Maharashtra Ltd. (APML), Adani Power Rajasthan Ltd. (APRL), and others.

A panel made up of Justices Krishna Murari and Sanjay Karol rejected the appeal brought by the customs department against APML, APRL, and others after hearing thorough arguments from both sides.

The highest court ruled that the project costs of APML and APRL were either equivalent to or less than the price of peers/competitors, according to the counsel acquainted with the situation.

The attorney noted that the transaction was an EPC contract granted to the lowest bidder after international competitive bidding, and that the price was less than the benchmark per megawatt cost set by the Central Electricity Regulatory Commission (CERC) (ICB).

According to the attorney, the supreme court verified that there was no overvaluation in the import of capital goods by upholding the conclusions of both the adjudicating authority and the appeal tribunal. On Monday, the supreme court rejected the petition from the customs.

After ICB, APML and APRL imported the goods needed to construct up thermal power plants in Rajasthan and Maharashtra.

Likewise, a consortium headed by PMC Projects (India) pvt. ltd. imported supplies for the construction of a transmission line and substation package for Maharashtra Eastern Grid Electricity Transmission Co. Ltd. after being given the contract by ICB (MEGPTCL).

In May 2014, the Directorate of Revenue Intelligence (DRI) sent show cause notes (SCNs) to APML, APRL, MEGPTCL, and other parties, stating that the import of capital items had been overvalued.

After thoroughly examining the matter, the adjudicating authority of DRI in 2017—the same authority that had previously issued the SCNs—held that all of the imports were genuine and came to the conclusion that the value reported was accurate and did not need to be revised. SCNs were afterwards dropped.

In 2022, the appeal panel rejected the customs department's claim and affirmed that Adani had not overvalued the equipment while importing it.